- Loan Modification Kit 1
- DRE Advance Fee Agreement
-
Information Loan Modification Forms Packet
- Modification Checklist
- Hardship Letter
- Modification Application
- Many other forms to be used in the Loan Modification process
- Compliance Advertising Review on current advertising (future advertising reviews to be priced separately)
- Compliance Advertising Checklist
- DRE Trust Accounting Requirements and sample form – CA only
- FAQs
- We will submit all information to the DRE on your behalf
- DRE Licensing Included
Product Specifications
Kit 1 Includes a DRE Advance Fee Agreement that meets all their requirements.
Moreover, the included informational packet will help give you your jump start in assisting borrowers stay in their homes. This packet includes:
- Loan Modification Checklist
- Various forms to assist through the modification process
- Sample Trust Account forms on how to appropriately handle your trust accounting for your loan modifications
- FAQs
- 1 hr of consulting time
The CA DRE requires that all advertisement to be used with loan modifications MUST be sent to them for approval when submitting the advance fee agreement. We will perform a one time review on your advertisement for compliance with the DRE and federal law and provide you your own advertising checklist for future reference and to eliminate advertising violations as part of this entire kit.
We will provide you both a hard copy and electronic version of the DRE's handbook on their trust accounting requirements as well as important Web sites for you to review and stay abreast of current events.
All useable forms will be provided electronically and ready for your logo.
Under the DRE, you must have brick and mortar in California. Contact us for an option that is right for you.
- Loan Modification Kit 2
- All of Kit 1 PLUS
- Wholesale Contract for Wholesale Loan Modifications
-
Regulatory Instructional Sheet
- Information on RESPA and how it impacts you through Loan Modifications
- Information on other Regulatory items that may apply
- Basic Regulatory Heads up information
Product Specifications
In Kit 2 you will receive everything that is provided in Kit 1 but you will also get a Regulatory Instructional Sheet written by our attorney. This instructional sheet will help you understand how to comply with certain federal requirements while performing loan modification services. Some companies are providing modification services on a wholesale basis by getting referrals through Realtors or Loan Brokers. They are receiving a fee for referring those clients. HUD views this as a RESPA violation if not set up properly. We guide you on what to look for and how to properly set up your internal policy and procedures to stay compliant. In addition, you will receive heads up information on regulatory issues and other bits of information that may apply from a regulatory standpoint. Lastly, you will also receive a wholesale contract to use with your marketing partners. This contract will also keep you compliant with RESPA if followed properly internally.
- Loan Modification Kit 3
- All of Kit 2 & 3 PLUS
- State by State matrix on where you can do loan modifications and the licensing and advance fee requirements in other states. If states currently have no licensing requirements pending legislation will be provided if any.
Product Specifications
All items in Kit 1 and 2 plus a 50 state matrix detailing where you can do loan modifications on a nationwide basis. This matrix will tell you what laws were reviewed and it will provide all cites, advance fee agreement requirements and potential licensing requirements. In addition, we will provide all bulletins from state agencies where available. Lastly, any pending legislation will be followed and updated accordingly on the matrix.
Understanding the Loss Mitigation Process
It is important to know what Loss Mitigation means and what types of processes can fall within the entire Loss Mitigation process. Loss Mitigation is a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan. Typically when a borrower is more than 30 days delinquent on a mortgage the loan ends up in the Loss Mitigation department. There are many forms Mitigation that the borrower might fall under. Those areas are as follows (click for definitions):
- Loan Modification
- A loan modification is typically a change in terms to an existing loan made by a lender in response to a borrower's long-term inability to repay the loan. Loan modifications normally involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default.
- Forbearance
- Forbearance is a Lenders postponement of foreclosure in order to give the borrower time and an opportunity to make up for overdue payments. In many instances Forbearance may take place if a "Life Event" has taken place. A "Life Event" is generally characterized as a death in the family, loss of job, etc.
- Deed in Lieu
- Deed in Lieu is also used to avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process doesn't allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.
- Short Sale
- A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's Loss Mitigation department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Most Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable. In 99% of all cases it is not a settlement-in-full.
- A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history and the partial control of the monetary deficiency. Additionally, a short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.
All of the above listed Loss Mitigation efforts must be taken very seriously. It is extremely important to understand what is in the best interest for the borrower. You may want to spend some time in the beginning completely understanding the borrower’s financial obligations and budgeting. This might also be the time to educate the borrower on what the can afford and how to better budget for their mortgage payments.